Fallen angels total 47 so far in 2003, set to end year below 2002 level, S&P says

New York, Oct. 20 - Forty seven companies have been downgraded to junk from investment grade so far this year, well below the 65 at the same point a year ago, according to Standard & Poor's.

As a result, the rating agency says the total for the year will "almost certainly" be lower than last year, the first year-on-year decline since 1996.

The trend is in line with S&P's view that the current credit cycle has reached a trough and a gradual recovery is under way.

The total of 47 fallen angels for 2003 affects $65.8 billion of debt. Since the last report in September a further three companies have been downgraded to junk.

At the same point in 2002, the 65 total covered $162.8 billion of debt.

For 2003, the U.S. accounted for 28 of the 47 downgrades, Europe had 12, Asia-Pacific four and Canada three.

But S&P said that while most regions are seeing declines in the number of fallen angels Europe could still match last year's record pace.

By industry, the capital goods and media and entertainment sectors generated the largest number of fallen angels globally at six each. Forest products and building materials; retail/restaurants; and insurance had four each while chemicals, packaging and environmental services; consumer products; metals, mining and steel; and telecommunications had three each.

As of Oct. 20, S&P listed 46 issuers as most vulnerable to becoming fallen angels, identified as companies rated BBB- and either with a negative outlook or on CreditWatch negative. That is a reduction from 48 in September. Since then once company has been downgraded, one had a change in outlook, three no longer have any rated debt and one issuer is no longer rated. Four issuers were added to the list, two in the U.S., one in the U.K. and one in Canada.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.